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Talon Metals agrees to supply Tesla with nickel concentrate from Tamarack Nickel Project

January 10, 2022

Talon Metals Corp. announced that it has entered into an agreement with Tesla Inc. for the supply and purchase of nickel concentrate to be produced from the Tamarack Nickel Project in Aitkin County, MN. The execution of the agreement follows an extensive and detailed due diligence period performed by Tesla and lengthy negotiations between the parties.

“This agreement is the start of an innovative partnership between Tesla and Talon for the responsible production of battery materials directly from the mine to the battery cathode. Talon is committed to meeting the highest standards of responsible production that is fully traceable and that has the lowest embedded CO2 footprint in the industry. Talon is excited to support Tesla’s mission to accelerate the transition to renewable energy,” said Henri van Rooyen, chief executive officer of Talon.

“The Talon team has taken an innovative approach to the discovery, development and production of battery materials, including to permanently store carbon as part of mine operations and the investigation of the novel extraction of battery materials. Responsible sourcing of battery materials has long been a focus for Tesla, and this project has the promise to accelerate the production of sustainable energy products in North America,” said Drew Baglino, SVP of Powertrain and Energy Engineering at Tesla.

Under the terms set out in the agreement, Tesla has committed to purchase 75 kt (165 million lbs) of nickel in concentrate, representing a portion of the metals projected to be produced from the Tamarack Nickel Project. Tesla also has a preferential right under the agreement to negotiate the purchase of additional nickel concentrate over and above the initial 75 kt (165 million lbs) commitment.

The term of the agreement is six years or until a total of 75 kt (165 million lbs) of nickel in concentrate has been produced and delivered to Tesla. The agreement is conditional upon: (i) Talon earning a 60 percent interest in the Tamarack Nickel Project; (ii) Talon commencing commercial production at the Tamarack Nickel Project; and (iii) the parties completing negotiations and executing detailed supply terms and conditions. Talon will use commercially reasonable efforts to achieve commercial production on or before Jan. 1, 2026 at the Tamarack Nickel Project, which may be extended by the agreement of the parties for up to 12 months following which Tesla has a right to terminate the agreement and Talon may elect to sell to other parties.

Talon and Tesla will work together to optimize nickel concentrate grades and metal recoveries.

The purchase price to be paid by Tesla for the nickel in concentrate will be linked to the London Metals Exchange (LME) official cash settlement price for nickel. The parties have also agreed to share in any additional economics derived from by-products extracted from the nickel concentrate, such as iron and cobalt.

 

 

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